STATE'S LAW CONTESTED INSURERS' CASE NOW IN HIGH COURT.

Byline: Bill Hillburg and Lisa Friedman Washington Bureau

WASHINGTON - For the insurance industry, it's all about process and jurisdiction. For Holocaust survivors and the heirs of victims, it's all about justice and overdue compensation for unspeakable horrors.

The U.S. Supreme Court will hear arguments Wednesday in a case that pits insurers against a 1999 California law that requires companies that sold Holocaust-era life insurance policies to reveal their records and process claims or be barred from doing business in the state.

``The key issue here is respect for the families and their survivors,'' said David A. Lash, executive director of Bet Tzedek Legal Services, an agency in the Fairfax District and North Hollywood that has been handling Holocaust survivors compensation claims for 30 years.

Lash said that, since World War II, European insurance companies, including several with large subsidiaries in California, have been stonewalling the families of those who died in the Nazi death camps.

To process these claims, the insurers often demand copies of long-lost policies and official death certificates.

``Hitler did not issue death certificates,'' said Lash. ``These companies have been waiting out aging Holocaust survivors and heirs, figuring the longer they delay, the less they will have to pay. The only thing that has motivated these companies is litigation and threats to their ability to do business.''

Insurance companies, backed by President George W. Bush and his administration, contend that California has no authority to regulate commerce outside its borders, much less in other nations. The 1999 state law, they argue, tampers with U.S. foreign policy.

Former President Bill Clinton's administration took a similar stance.

``It's a violation of interstate commerce,'' argued Stephen Zielezienski, assistant general counsel for the American Insurance Association, the plaintiff in the High Court case.

``The state is messing around with foreign policy,'' said Robin Conrad, an attorney for the U.S. Chamber of Commerce, which is also opposed to the California law.

Holocaust-era claims could cost insurers up to $4 billion, according to several insurance industry analysts. The claimants include aged spouses of Holocaust victims and children whose parents died in the concentration camps.

Dr. Morry Waksberg of Van Nuys, who worked to pass the 1999 law as a leader of Second Generation, a group of children of Holocaust survivors, angrily recalled a legislative hearing during which an insurance company lawyer said ``there is no basis for these claims.''

``This is the definition of bad-faith conduct,'' said Waksberg, whose mother survived the Auschwitz death camp and whose late father was imprisoned by the Nazis at Dachau, where his first wife and three sons were murdered.

``These companies have been earning interest for years on this money,'' he said, ``and all they want to do is delay, delay, delay while taking advantage of American foreign policy.''

California's Holocaust Registry Law requires all insurers doing business in the state to divulge information on Holocaust-era polices and claims.

The data is included in a state Holocaust Era Insurance Registry that is available to the public. Advocates see the registry as a key tool in helping survivors and their heirs settle claims.

Insurers in 2000 won a temporary injunction to block implementation of the law. In 2001, the San Francisco-based 9th Circuit Court of Appeals upheld the law but let the injunction stand, sending the case to the Supreme Court.

California is home to an estimated 5,600 Holocaust survivors, more than any other U.S. state except New York, according to the state Department of Insurance.

Most claims have been lodged against Allianz AG, a German insurer, and Italian-based Generali. Both sold life policies during the Nazi era and have also been accused of cynically marketing insurance to Jews and other victims after Hitler had begun his liquidation program.

The state law only applies to Allianz's U.S. subsidiaries, including Fireman's Fund, and Generali's U.S. holdings which include Farmers Insurance.

CAPTION(S):

photo

Photo:

Dr. Morry Waksberg has family photos of himself with his parents, Jack and Ida Waksberg, who survived the Holocaust, and his grandfather, Moshe Waksberg, who died at Auschwitz.

Michael Owen Baker/Staff Photographer